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Ramalingam

Ramalingam Kalirajan  |6958 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 02, 2024

Ramalingam Kalirajan has over 23 years of experience in mutual funds and financial planning.
He has an MBA in finance from the University of Madras and is a certified financial planner.
He is the director and chief financial planner at Holistic Investment, a Chennai-based firm that offers financial planning and wealth management advice.... more
Asked by Anonymous - Jan 09, 2024Hindi
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Is ICICI Prudential S&P BSE Sensex Index Fund Direct Growth good to invest in longer term.I have been investing for 3 years now .Getting XiRr of 17%

Ans: If you are not able to select a good actively managed equity fund, then you can continue to invest in this.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam

Ramalingam Kalirajan  |6958 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 18, 2024

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I have invested rs 5 lac in axis tax saver direct growth on 10th april.is it a good fund and can i tansfer to direct IDCW plan.
Ans: That's a great question! Investing Rs. 5 lakh in Axis Tax Saver Direct Growth on April 10th shows initiative. Here's a breakdown of your current fund and the pros and cons of Direct vs. Regular Mutual Fund investment plans:

Axis Tax Saver Direct Growth:

Reputable Fund House: Axis Mutual Fund is a well-established fund house.

Tax Benefits: ELSS (Equity Linked Savings Scheme) funds offer tax deductions under Section 80C.

Direct Plan: You've chosen a Direct Plan, which has a lower expense ratio (fee) compared to a Regular Plan. However, there are some trade-offs to consider:

Disadvantages of Direct Plans:

No Advisor Guidance: Direct plans don't involve a distributor or advisor. You'll need to do your own research and choose funds.

Limited Support: There might be limited hand-holding or investment guidance compared to a Regular Plan.

Portfolio Management: The responsibility of monitoring your portfolio and making adjustments falls on you.

Benefits of Regular Plans (through a Mutual Fund Distributor - MFD):

Personalized Advice: An MFD can assess your risk tolerance and goals, recommending suitable funds.

Ongoing Support: They can provide ongoing support, answer your questions, and help navigate market fluctuations.

Convenience: They handle paperwork, account opening, and transactions, saving you time.

MFD with CFP Qualification:

Expert Guidance: Consider an MFD with a Certified Financial Planner (CFP) qualification. They have advanced financial planning knowledge and can create a personalized investment plan for you.
Considering Transfer to IDCW Plan:

Exit Load: Check if Axis Tax Saver Direct Growth has an exit load (fee for exiting within a specific period).

Similar Investment Style? Ensure the IDCW plan has a similar investment style and tax benefits as your current fund.

Review Both Funds: Research both Axis Tax Saver Direct Growth and the IDCW plan to compare their performance and investment strategies.

Remember:

Long-Term View: Focus on your long-term investment goals. Equity markets can be volatile in the short term.

Diversification Matters: Consider if this ELSS fund fits with your overall asset allocation (mix of investments).

By potentially consulting an MFD-CFP, you can gain valuable guidance and build a portfolio aligned with your goals, even if you decide to stick with your Direct Plan!

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |6958 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 08, 2024

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Kotak Nifty Midcap 50 Index fund Direct Plan growth - Pl suggest is it good for investment for new entry investors.
Ans: Index funds track a market index. They aim to match the index's performance. They offer lower costs and less active management.

Disadvantages of Index Funds

Limited Flexibility: Index funds are bound to the index. They can't adapt to market changes.

Average Returns: They aim to match, not beat, the market. Actively managed funds often outperform.

Market Risk: They mirror the market. In a downturn, they suffer equally.

Benefits of Actively Managed Funds

Professional Management: Experienced managers make investment decisions. They aim to outperform the market.

Flexibility: Managers can adjust the portfolio based on market conditions.

Potential for Higher Returns: Active funds often deliver higher returns than index funds.

Disadvantages of Direct Funds

No Advisory Support: Direct funds bypass intermediaries. Investors miss out on professional advice.

Time-Consuming: Managing direct investments requires time and knowledge. Many investors lack both.

Risk Management: Without a Certified Financial Planner, investors may struggle with risk management.

Benefits of Regular Funds with MFD and CFP

Expert Guidance: A CFP offers tailored advice. They help in selecting the right funds.

Convenience: Investing through an MFD and CFP saves time. They handle paperwork and portfolio management.

Risk Management: CFPs help in managing and mitigating risks. They provide a balanced portfolio strategy.

Kotak Nifty Midcap 50 Index Fund Overview

This fund tracks the Nifty Midcap 50 Index. It invests in 50 midcap companies. It offers exposure to mid-sized companies.

Performance and Risks

Potential Growth: Midcap companies can grow quickly. They offer higher returns than large caps.

Volatility: Midcaps are more volatile. They carry higher risk than large caps.

Market Dependence: The fund's performance depends on the midcap market. In a downturn, it can underperform.

Suitability for New Investors

Risk Tolerance: New investors must assess their risk tolerance. Midcap funds can be volatile.

Investment Horizon: Longer investment horizons can mitigate risks. Midcap funds need time to grow.

Diversification: Ensure a diversified portfolio. Don't invest solely in midcap funds.

Recommendations for New Investors

Seek Professional Advice: Consult a Certified Financial Planner. They provide personalized guidance.

Start with Balanced Funds: Consider funds with a mix of large, mid, and small caps. This reduces risk.

Gradual Investment: Invest gradually through SIPs. This averages out market volatility.

Building a Strong Portfolio

Diversification: Spread investments across asset classes. Include equity, debt, and liquid funds.

Regular Monitoring: Review your portfolio regularly. Adjust based on performance and goals.

Emergency Fund: Maintain an emergency fund. It covers unexpected expenses and avoids dipping into investments.

Final Insights

Investing in the Kotak Nifty Midcap 50 Index Fund requires understanding its risks and potential. For new investors, a balanced and diversified approach is essential. Consulting a Certified Financial Planner can provide the expertise and guidance needed for a robust financial strategy.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

..Read more

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Ramalingam

Ramalingam Kalirajan  |6958 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Nov 05, 2024

Asked by Anonymous - Nov 05, 2024
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Sir I am 47 years old and want to retire in next 2-3 years. My portfolio is as under FD-22 L MF-22 L. ( SIP of 33000 running) Gold--10 L EPF--24 L and App Gratuity -10 L Equity--10 L Rental Income -25000 per month from 80 Lacs flat. ( No loan pending now) 1 cr term plan and 10 l mediclaim running Parental House -2.5 cr and Land -2.5 cr. My son is studying in second year of engineering. And my monthly hone expense is not more than 30000-35000 per month. Can I afford to retire ?
Ans: It’s commendable that you've accumulated a diverse portfolio with a clear retirement goal. Let's evaluate if your current portfolio aligns with a secure retirement.

Portfolio Review and Income Assessment
Based on your retirement aspirations, let’s consider each component of your portfolio and its potential to generate sustainable income:

Fixed Deposits (FD): Rs 22 lakh
FD interest can serve as a steady income source, though it typically yields lower returns, which may not keep up with inflation over the long term.

Mutual Funds (MF): Rs 22 lakh, with a SIP of Rs 33,000
MFs offer potential growth and help combat inflation. Continuing your SIPs could grow this corpus further, providing higher returns than fixed-income sources.

Gold: Rs 10 lakh
Gold adds stability and can be liquidated if needed. However, it might not be the best primary income source.

Employee Provident Fund (EPF): Rs 24 lakh and Gratuity Approx Rs 10 lakh
EPF and gratuity offer safe post-retirement funds. When you withdraw, they can be used as a source of regular income or reinvested for returns.

Equity Investments: Rs 10 lakh
Your equity investments add growth potential. Over time, this can be a crucial source to combat inflation.

Rental Income: Rs 25,000 per month
Rental income provides a consistent cash flow, covering a large portion of your monthly expenses. This income will be valuable post-retirement to meet regular needs.

Expense and Income Projection
With monthly expenses at Rs 30,000–35,000, and rental income already covering most of these costs, your current lifestyle is well supported. However, to retire comfortably, a buffer for healthcare, travel, and inflation is necessary.

Strategy for Retirement Readiness
Based on your assets and expected needs, here’s a recommended approach to secure a steady retirement income:

Mutual Fund Strategy
Continuing your SIPs for the next 2-3 years will help grow your corpus further. Consider moving part of the equity-based mutual funds into debt funds close to retirement to reduce risk while generating returns.

Systematic Withdrawal Plan (SWP)
At retirement, you can initiate an SWP from your mutual fund corpus, providing a steady income. This strategy allows capital appreciation with controlled withdrawals, reducing the risk of prematurely depleting your funds.

Fixed Deposit Laddering
To maximise interest rates and ensure liquidity, consider a laddering strategy with your FDs. This will help meet emergency needs and take advantage of better rates.

Rental Income
Your rental income of Rs 25,000 is a reliable source. To protect it, ensure the property remains well-maintained and consider lease renewals with trusted tenants to maintain stability.

Contingency for Healthcare and Son’s Education
Health Insurance: Rs 10 lakh
Assess your current health cover, especially considering rising medical costs. A top-up or super top-up plan could add an extra layer of protection.

Son’s Education
Your son’s education may require additional funding. Any shortfall could be met by partial liquidation of non-core assets, like gold or FDs, if needed.

Estate and Legacy Planning
Your parental house and land provide substantial long-term security. Though not income-generating immediately, they offer future flexibility if liquidated or rented.

Final Insights
Your assets, income sources, and low monthly expenses indicate a strong readiness for retirement. With minor adjustments for healthcare and education, you can comfortably meet your goals. Continuing your current SIPs for the next few years and optimising your FD and MF corpus will help sustain your income post-retirement.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner
www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

...Read more

Milind

Milind Vadjikar  |577 Answers  |Ask -

Insurance, Stocks, MF, PF Expert - Answered on Nov 04, 2024

Asked by Anonymous - Nov 04, 2024Hindi
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What are different types of annuity plans. Do we have plan which gives fixed income till I live and then principle is return to my nominee. If I have 3 Cr , what max return per month I can get ? And is this tax free ?
Ans: Hello;

Annuities are types of plans where you make a lump sum payment and get a regular income for a certain period of time or for life.

There are primarily two types of annuities:

1. Immediate annuity
This is a type of annuity plan that provides you with a guaranteed regular income immediately after you pay the lump sum premium.

2. Deferred annuity
In a deferred annuity plan, your income starts at a later date and you can choose when you want the regular income to start.

Based on type of regular monthly payments annuities could also be classified as Fixed annuity and Variable annuity.

Below are the various options available in an annuity plan:

A. Life annuity: In this option, you receive annuity for life. The frequency of payments is usually pre-decided by you at the time of the purchase of the policy.

B. Joint life annuity: This is similar to a life annuity. In this option, you receive annuity payments for life. In your absence, your spouse continues to receive annuity payments for life.

C. Life annuity with return of purchase price: This provides you annuity payments for life. In case of an unfortunate event, your nominee will receive the amount you paid at the time of the purchase of the policy.

D. Annuity payable for a pre-decided term: This provides you the option to choose the duration for which you would want to receive annuity payments. The period can be 5 years, 10 years, or more.

Yes plans are available which can pay provide you fixed income and return of purchase price (principle) to your nominee.

With 3 Cr corpus you may expect 1.5 L (pre-tax) per month payout considering 6% annuity rate. This varies from company to company and if you shop around you may get a better rate then the one considered here.

This is like pension income and is taxable income as per your age and income slab.

Best wishes;

...Read more

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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